The Japanese economy has entered recession, official figures for the July-to-September period showed Monday, according to dpa. The world's third-largest economy contracted at an annualized rate of 1.6 per cent in the quarter, following a contraction of 7.3 per cent in the previous three-month period, the Cabinet Office said. The reading was far worse than the 2.0-per-cent growth predicted in a poll of economists by the Nikkei business daily, as the country faced sluggish consumer demand after a controversial sales tax hike in April. Economic Revitalization Minister Akira Amari conceded the downturn of the economy was bigger than the government had expected. Amari said the prime minister would decide soon whether to go ahead with another sales tax hike to 10 per cent in October 2015 after raising it to 8 per cent in April, the first increase in 17 years. The minister sounded a cautious note in regard to the second hike, saying the economy "must not slow down and fall back into deflation."